Are you ready to supercharge your options trading journey in 2024 and discover the strategies that have already yielded a remarkable 3% return in just 23 days? In this article, I’ll guide you through the step-by-step process of my trading plan, covering everything from setting up your charts to executing specific strategies.
Setting Up Your Chart
To kick things off, let’s talk about setting up your chart. I use Bollinger Bands with a length of 200 and a standard deviation of 2.1. This helps me identify key market conditions. When the S&P 500 is within the band, it’s business as usual. However, when it ventures outside the band, we’re on the lookout for potential overextension points. Don’t worry; I’ll guide you through this process with clear visuals, making it easy to implement on your chosen charting platform.
Intra-Band Strategies
When the market is trading inside the band, I employ two main strategies. Firstly, the 1-1-2 strategy involves setting up trades with a long-term perspective, utilizing options with 90 to 120 days until expiration. Additionally, I implement my normal credit spread trades, targeting a 10% return. These strategies are ideal for stable market conditions, providing consistent returns.
Strangle Strategy for Increased Volatility
If the market is within the band and implied volatility (IV) doubles, I deploy the strangle strategy. This involves selling both a call and a put to capitalize on decreasing IV. This strategy has proven highly effective, as demonstrated by my recent 211% return in just four days. I share insights on selecting the right options and when to take profits, ensuring you can make the most of volatile periods.
Breaking Outside the Band
When the market breaks outside the Bollinger Bands, indicating potential overextension, I switch gears. Exiting any long positions is the first step to mitigate risk. I wait for the market to break above and then come back down through the band before re-entering. Additionally, I implement a long put or short call strategy, providing a hedge against potential downturns. This is a crucial move during market extremes, preventing significant losses while positioning for potential gains.
Risk Management and Trade Rules
I emphasize the importance of risk management, limiting trading to 50% of max buying power when VIX is below 25 and allowing up to 75% when VIX surpasses 20. Establishing stop-loss points, planning trades meticulously, and exercising patience are integral components of my approach.
Remember, the market is always right, and revenge trading is a big no-no. Finally, I stress the significance of being open to closing a winning trade when necessary.
2024 Options Trading Plan
And there you have it – my 2024 Options Trading Plan! With a solid foundation of strategies, risk management, and trade rules, this plan has propelled me to a 3% return in just over three weeks.
If you want to trade options profitably with a 86%+ win rate and consistently generate monthly income, then join the 10% Credit Spreads program!
Thanks for reading 🙂
Austin Bouley
CEO & Chief Strategy Officer